What are Turnaround Strategies

Companies use a variety of turnaround recovery

General Sense tactics to bounce back from a time of declining
Transform a loss making company into a performance. The variety of measurements is vital
profit making one
since they signal the beginning of a company's
recovery phase following a period of severe
Business Sense negative.
To deal with the issues of a loss making
company It is a procedure intended to revitalize businesses.
Root cause analysis is performed to identify the
Academic Sense causes of failure, after which short- and long-term
To solve the root cause failure of a loss- solutions are devised to turn around the market's
making company underwhelming performances.
 Reasons for Turnaround Strategies
Four common categories of growth stalls
• Premium position captivity
• Innovation management barrier
• Premature core abandonment
• Talent bench shortfall
When the Growth Stalls
Revenue growth crisis necessitates the need to have a
turnaround strategy. The company runs the risk of not
seeing a healthy top-line growth again
Why the Growth Stalls
Failure to adapt assumptions that drive company strategy
to changes in external environment is the culprit behind
stalled growth
How to Avoid them
Two tools to avoid growth stalls:
Self-test to diagnose impending stalls
Identifying strategic assumptions and test their relevance
 Types of Turnaround Strategies
COST-BASED
APPROACH
• Cost reduction strategies involve the
reduction in the firm’s total costs
including selling, general and
administrative and interest costs
• Asset retrenchment strategies involve net
reductions in long- and short-term assets
so that the firm has only adequate assets
to operate with
• Revenue generating strategies are
undertaken by the firm through focusing
on its existing lines of products,
initiating price cuts and increasing
marketing expenditures in order to
stimulate demand
3R STRATEGY -
RETRENCHMENT,
REPOSITIONING,
REORGANIZATION
• Application of these strategies leads to
the reversal of organizational decline
and hence gives the firm the ability to
attain a competitive advantage.
• Retrenchment is a strategic response that
considers reducing the scope and size of
the firm. The major emphasis of the
strategy is to ensure that there are cuts
in the unproductive and unprofitable
segments of the firm which in the long
run releases available resources for
investment in the segments considered
potential for higher performance.
 Corporate social responsibility
CSR: (CSR)
Overview
CSR is a self-regulating business model that helps a company be socially accountable—to itself,
its stakeholders, and the public.
Ebiquity Global CSR study found that 91% of global consumers expect businesses to operate

and Types responsibly to address social and environmental issues.

Carroll’s Pyramid of Corporate Social

Responsibilities

Philanthropic Responsibility
Giving back to the communities they exist in and
donate to causes that align with their company
mission

Environmental Responsibility
Engaging in environmentally friendly practices

Ethical Responsibility
Engaging in fair business practices across the
board—including treating all stakeholders
ethically and with respect.

Economic Responsibility
Making financial decisions that
prioritize doing good, not just making
more money
CSR and Competitive advantage
In the current global competitive environment, CSR is regarded as part of building competitive advantage. The concept
becomes a strength of the enterprise, as it is not only price of goods or services, but also the circumstances in which
they are made that distinguish an enterprise from its competitors, i.e. they become sources of competitive advantage.

Corporate Social Responsibility must be connected with an enterprise’s regular activities and the profile of its actions
to improve its image and reputation. An improved reputation and image enhance customer satisfaction as well as
consequently boost the sales and profits of the enterprise, which is the goal of each action by means of enhancing
competitiveness.

In addition, CSR facilitates access to capital, cuts costs of cooperation with partners, improves the potential for
attracting the best workers, reduces business risk as well as increases stability and development opportunities.
Consequently, enterprises attempt to build their positive reputation by various methods and instruments.

CSR actions humanise a firm and steer it away from focusing on merely profit towards a concern for all stakeholders .
Wages themselves are unable to sustain emotional links between staff and their enterprise. In this connection, CSR
may serve as a factor emotionally binding employees to their firm which is a potential source of competitive
advantage.

CSR is a source of competitive advantage by creating intangible resources within an enterprise which are important
to securing competitive advantage, as these properties are valuable, rare, and hard to imitate.
CSR as a Competitive Advantage:
Framework
Benefits of
CSR
1 Employee Retention
A CSR plan demonstrates that a firm
is caring and treats all people,
including employees, with respect.
3 Branding
•When it comes to branding, businesses must generate
trust with their target audience to have a successful
brand and keep customers. Having a CSR plan may
help build a positive reputation.
5 Risk Management
•Social and environmental risks have a significant
impact on enterprises. These elements have a long-
term impact on growth plans for any business.
2 Improved public image
Many a times, consumers assess a brand's
public image while make a decision of
whether they should buy their products or
not. CSR helps a brand improve their
public image and in turn attract more
customers.
4 Cost savings
Many small modifications in favour of
sustainability, such as utilising less
packaging, can help you save money on
production. Example - Cochin Airport in
India (operating completely on solar
power)
 Strategy Implementation Process

Communication
Articulation & Allocation
Engagement
Consensus within Convert strategic objectives
into clear short-term Managerial
responsible team
operating objectives to be interventions to ensure
about outcomes to
assigned to groups for achievement of
be delivered Supervision strategic objectives
Verification delivery
Confirming Monitor the progress
of the teams in
acceptability of
strategic outcomes delivering the
strategic objectives
with stakeholders
 Strategy Implementation vs. Formulation
Structural

Strategy
Implementation
● Action-orientation
● Comprehensive
● Demands skills &
involvement
Functional Behavioral

Strategy Formulation Strategy Implementation

Formulation to implementation is forward-linkage Implementation to formulation is backward-linkage

Organising before action Managing during action

Theoretical & intellectual process Practical and field skills

Emphasizes effectiveness Focuses on efficiency

 Strategy Implementation : Key Facets
People
A team that not only understands the strategy that needs to implement
01.
People but also has the skills and bandwidth to support you

Organization
Everyone in the organization needs to know what their
05. 02
Systems .
Organization responsibilities are so they can be accountable for their part in
Key Culture the strategy
implementing
Component Ensuring that everyone knows what they need to know and feels valued and
s included is crucial for a successful and effective implementation

Resources
04. 03. Effective resource allocation is one of the most important parts in strategy
Resources Cultur
e implementation.

Systems
The tools, capabilities, and systems put in place are another key
component.
What is Strategic Implementation?
• Turning strategy plan into action
• Implementation plan outlines the steps an organization needs to
take in order to achieve a goal or objective

P-O-L-C FRAMEWORK
PLANNING ORGANIZING LEADING CONTROLLING

Vision and Mission Organization Design Leadership Systems and Processes

Strategizing Culture Decision Making
Communications Strategic Human
Goals and Objective Social Networks Groups/Teams Resources
Motivation

STRATEGY FORMULATION STRATEGY IMPLEMENTATION

 Key Components to Support Strategy Implementation
Mission, vision, values, objectives,
PURPOSE strategies, tactics, measurement of results
Strategic
and SWOT analysis
Theories

Metrics, KPIs, Rules of conduct and guidelines

PERFORMANCE PRINCIPLES
measurements and expected for conducting business (ethical
results and moral references to which
STRATEGIC employees must commit)
IMPLEMENTATION

PEOPLE PROCESSES
Employees Set of steps where resources (people,
(teams/individuals), materials, machines and methods) are
customers and suppliers of transformed into products and services
organization